Champion International Corporation and The Deferiet Paper Company Reach Agreement On Sale of Mill.

STAMFORD, Conn.--(BUSINESS WIRE)--May 11, 1999--

Champion International Corporation (NYSE: CHA) and The Deferiet Paper Company, a new wholly owned subsidiary of Crabar Paper & Allied Products Corporation, announced today that they have signed an agreement for the sale of Champion's groundwood specialty mill in Deferiet, New York to The Deferiet Paper Company. The sale price was not disclosed. The acquisition is subject to various conditions, including applicable regulatory approvals. The companies expect that the sale will be completed in the second quarter.

The Deferiet mill is located in Jefferson County, New York. The mill currently produces approximately 225,000 tons per year of coated groundwood, uncoated groundwood, supercalendered, and coated freesheet specialty papers for the publishing and wholesale distribution industry. There are approximately 600 employees working at this facility.

Crabar Paper & Allied Products Corporation, based in Dayton, Ohio, is a privately owned holding company with operations in the Midwest and Southwest United States. Craig Johnson, chairman and chief executive officer of Crabar, who worked for Champion from 1968 to 1987, said, "I am extremely pleased to complete the negotiations with Champion, and I am looking forward to once again being part of the Champion heritage and bringing the Deferiet mill into the Crabar family of operating companies."

David Paulus, a former officer of Felix Schoeller Company, a German-based manufacturer of photographic, digital, and other specialty fine papers, and who served as president of Felix Schoeller's United States paper manufacturing operations, will become a principal in Crabar and the president of The Deferiet Paper Company. In commenting on the agreement, Mr. Paulus said, "This mill and its employees have a proud history dating back to the founding of the St. Regis Paper Company. Its reputation for quality products and excellent service will enable Deferiet to become a strong platform for future growth."

This sale is part of Champion's plan, which the company announced in October of 1997, to divest non-strategic product segments and facilities. At that time, the company adopted a three-pronged strategy to maximize total shareholder return by focusing on strategic businesses, increasing profitability, and improving financial discipline.

Champion International Corporation is an integrated forest products company with significant operations in the United States, Canada, and Brazil. Champion is a major producer and distributor of coated and uncoated papers. The company's other products include market pulp, lumber and plywood, and selected paper for packaging. Champion has the responsibility for the sustainable management of more than eleven million acres of forestlands supporting its manufacturing facilities.